The Financial Industry Regulatory Authority Inc. last week fined and suspended two registered reps for violating industry rules regarding how firms and brokers treat private client information.
The rule, known as Regulation S-P, is the standard for safeguarding and protecting customer records and information. Firms and brokers routinely fight over such client information, and if reps are not careful to follow industry rules, they can wind up facing lawsuits from their former employers or being investigated by regulators.
The two advisers, Joseph Olheiser and Daniel Hee, mishandled client information when leaving to work at a new firm, according to the Finra settlements. They were both suspended for 10 days and fined $5,000.
Before joining Raymond James Financial Services Inc., Olheiser "improperly removed nonpublic personal customer information from Morgan Stanley without the customers' knowledge or consent," according to Finra, which posted the settlement on its website last Wednesday.
Two days later, Finra posted its settlement with Hee. "Between November 2015 and January 2016, Hee took customers' nonpublic personal
information from UBS and gave it to a representative he planned to work with at [a new firm], without UBS's or the customers' knowledge or consent," according to Finra.
Both brokers agreed to the settlement without admitting or denying any of Finra's findings.
According to his BrokerCheck profile, Olheiser left Morgan Stanley in February 2019 for Raymond James Financial Services, left there a few months later and is now registered with Cabot Lodge Securities Inc., a midsize independent broker-dealer. He did not respond to a request to comment over LinkedIn.
Hee had been a broker at UBS and started working at Wells Fargo Advisors in 2016, according to BrokerCheck. He was "discharged" or fired in 2019 due to the client information and document issue. Hee is not currently registered with a brokerage firm and could not be reached to comment.
The financial advice industry has been facing inquiries into its cash sweep programs for years now.
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